Sanctioning Systems,Decision Frames,and CooperationAnn E. TenbrunselUniversity of Notre DameDavid M. MessickNorthwestern University

Three studies are used to examine how surveillance and sanctioning systems affect cooperative behavior in dilemma situations. The first two studies demonstrate thata weak sanctioning system results in less cooperation than no sanctioning system; furthermore, results from the second study suggest that sanctions affect the typeof decision people perceive they are making, prompting them to see it as a business rather than an ethical decision.The results from these studies are used to develop a theoretical model that postulates that the relationship between sanctions and cooperation is due to both a signaling effect, in which sanctions influence the type of decision that is perceived to be made, and a processing effect, in which the decision processing, including whether or not the strength of the sanction is considered, depends on the decision frame evoked. A third study providessupport for the processing-effect hypothesis.*

The use of surveillance and sanctioning systems to monitor and motivate employees is almost commonplace. It is estimated that over 60 percent of companies use surveillance and monitoring procedures, including taping phone calls, perusinge-mail messages, and relying on spy cameras (Selnowand Gilbert, 1997), Many managerial trends have contributedto the increasing importance of such systems in organizations.Concepts such as just-in-time inventory and total qualitycontrol, which rely heavily on monitoring performancerelative to a benchmark standard, have been argued to createa demand for systems of surveillance (Sewell and Wilkinson,1992), Surveillance and sanctioning systems have alsobeen seen as critical in promoting ethics in organizations,since it has been argued, the "failure to seriously monitor,measure and reward (punish) the performance of individualson the ethical plane will leave codes of conduct operating ina vacuum, of little use in actually promoting ethical behavior"(Lindsay, Irvine, and Lindsay, 1996: 403),Given the focus of many of our organizational theories, itcomes as no surprise that these systems play such a prominentrole in organizations. From theories about the cognitionsand behaviors of individuals to theories about the behaviorof firms, the monitoring and sanctioning of employee,managerial, and organizational actions are portrayed as importantcomponents of firm success. We see this emphasisin discussions of the functions of management, which havebeen described as consisting of the components "to plan,organize, staff and control" (Barnard, 1938: xiv). The lastcomponent, control, has been further specified to consist ofthree stages: (1) specifying and communicating objectives;(2) monitoring performance through measurement (feedback/control); and (3) motivating employees to accomplish objectivesby linking outcomes to achieving those objectives (Otleyand Bern/, 1980),At a micro level, the monitoring of performance is a centralpiece of Skinner's (1953) theory of reinforcement, in whichbehavior is measured and, based on the outcome, a particularreinforcement is applied. Agency theory, a more macrolevelperspective concerned with understanding and resolvingthe conflict between owners and workers (Jensen andMeckling, 1976; Fama, 1980), has as its focus the creationof systems that ensure worker connpliance. Monitoring ennployeebehavior is at the heart of these systems, in whichsurveillance of employee actions, accompanied by sanctionssuch as money or promotions, is used to reduce potentiallydestructive behavior {Pfeffer, 1994).Despite the emphasis on surveillance and sanctioning systemsfound in our organizational theories and the promise ofsuch systems for ensuring cooperation in organizations,there appears to be a growing number of skeptics.'' Pfeffer(1994) provided an insightful look at the counterproductiveeffects of managerial control systems. Similarly, Walsh andSeward (1990) have argued that inefficiencies in control systemsare linked to firm failure. Cialdini (1996) even characterizedsurveillance systems as one of the three "tumors" thatcontribute to unethical behavior in organizations. A variety ofspecific problems have been associated with sanctioningsystems. Scholars have argued that these systems send asignal of mistrust to employees, which in turn can lead toresentment, a feeling of distrust toward management, andoppositional relationships (Strickland, 1958; Kruglanski, 1970;Kipnis, 1972; Pfeffer, 1994; Cialdini, 1996). Systems that areseen as controlling behavior, rather than promoting autonomy,have also been argued to produce feelings of increasedpressure and tension, decreased creativity, decreasedcognitive flexibility, decreased positive emotions,and lower self-esteem (Deci and Ryan, 1987).

Perhaps themost frequently discussed downside of sanctions, however,is the effect on intrinsic versus extrinsic motivation. Withextrinsic motivation, the goal of an individual's behavior isdistinct from the behavior itself (Deci and Ryan, 1987), whileintrinsic motivation involves pursuit of an activity becausethere is an inherent satisfaction that is derived from pursuingthe activity. The external pressure to perform generated bysurveillance and sanctioning systems is asserted to be a detrimentto intrinsic motivation because individuals concludethat their behavior is caused by an extemal force and not bytheir natural preference for the activity (Deci and Ryan, 1987;Pfeffer, 1994; Cialdini, 1996). For example, Lepper andGreene (1975), found that preschool children who were toldthat their performance on a set of puzzles would be periodicallymonitored by a television camera exhibited less interestin the puzzles at a later point in time than children who werenot told their performance would be monitored. Similarly,Pittman et al. (1980) discovered that in-person surveillanceresulted in a reduction of intrinsic motivation.

The reduction in intrinsic motivation can have disastrous consequencesfor organizations. Surveillance and sanctioningsystems communicate to employees that responsibility forperformance rests with the system, not the individual (Pfeffer,1994). As a result, individuals become "less interested inthe desirable conduct for its own sake" (Cialdini, 1996: 57).The final outcome may be that the sanctioning system eitherhas no effect or actually increases the unwanted actionswhenever the system is not watching (Lingle, Brock, andCialdini, 1977; Cialdini, 1996). Thus, while control systemscan be useful in directing behavior, they can also produceundesirable effects.685/ASQ, December 1999

The purpose of this paper is to investigate the effects ofsanctions on cooperative behavior and to understand thecognitive basis for this relationship. Given the espoused importanceof such systems in organizational theories, onesituation in which they would appear to be effective is inprisoner and social dilemma situations. In these situations,individuals are faced with a decision either to cooperate ordefect. They are described as dilemmas because there is aconflict between individual and collective rationality (Kahan,1974): that is, the dominant or more profitable individualstrategy is to defect, and yet the dominant collective strategyis to cooperate. Thus, in the typical prisoner's dilemmain which individuals can either confess to police or keepquiet, the best strategy for Prisoner 1 is to confess (defect)rather than remain quiet (cooperate), regardless of what Prisoner2 does; however, if both prisoners confess, they areworse off than had they both remained quiet.

A social dilemma involves the same conflict between therational individual and collective strategy as does a prisonerdilemma, the only difference being that a social dilemma involvesmore than two actors. One typical form of a socialdilemma is a resource dilemma in which a group sharescommon access to a resource (i.e., water, land) from whichindividual members can harvest (Hardin, 1968). In these dilemmas,the rational individual strategy is for each individualto consume as much of the resource as possible, but if everyonefollows this strategy, the resource becomes exhaustedand all actors end up worse off than if they had consumedthe resource in moderate proportions. A real-lifeexample of such a dilemma involves the current situation inthe northeast fisheries, where fishers have followed the individuallyrational strategy to overharvest. The end result is anextreme reduction (if not elimination) of many principalground fish stocks and the collapse of many fisheries (NationalMarine Fisheries Service, 1992).

Dilemas are rife in organizations. At a department level, itis best for each individual department to consume as muchof the resources (i.e., budget, employees, space) as possible,but collectively, this strategy may reduce the viabilityof the firm and hence of its individual departments. Similarly,at an individual level, it makes sense for each employee toshirk his or her responsibilities, but if all employees adoptthis strategy, the end result (i.e., lower bonus pool, small orno salary increases) may leave them worse off than if eachhad expended some effort. Ensuring cooperative behaviorcan be difficult in organizational dilemmas, particularly becausedefection can be hard to detect (i.e., it is difficult tomeasure shirking), employee promotions and turnover resultin instability in the dilemma participants, and the large numberof participants makes communication nearly impossible.

Monitoring and sanctioning such behavior would appear tobe an effective solution to overcome these structural barriersto cooperation. By installing a sanctioning system to ensurethat all employees and departments are cooperating, bothindividual and organizational outcomes would be enhanced ifthe savings of the system are greater than its costs.

For example,with a sanctioning system designed to promote cooperationby fining individuals who are caught defecting, the686/ASQ, December 1999Sanctioning Systemsfine mathematically reduces the attractiveness of defecting,such that defection in the presence of such a system resultsin a lower expected value than defection when no such systemis in place. From a utility maximization perspective, onewould predict that this lower expected value would reducedefection. It has been asserted that the goal of sanctioningsystems is to increase cooperation, and hence decrease defection,by changing the payoff structure (Messick andBrewer, 1983) to make defection less rewarding, and researchhas shown that sanctions do induce cooperation(Yamagishi, 1986, 1988; McCusker and Carnevale, 1995),Yamagishi (1986, 1988, 1992) proposed that in addition tothis direct effect, sanctions may also have an indirect effecton behavior by altering expectations of others' behavior, thusreassuring reluctant cooperators that they will not be exploitedby others. Therefore, sanctions, by directly influencingthe attractiveness of defecting and/or by indirectly influencingbehavior through expectations of others, shoulddecrease the likelihood of defection.

In addition to these direct and indirect influences on cooperation,however, a sanctioning system may have unintendedconsequences (Lingle, Brock, and Cialdini, 1977;Pfeffer, 1994; Cialdini, 1996), Research on cooperation anddecision making in social situations indicates that to understandthese unintended consequences, it may be useful toexplore the effects that sanctioning systems have on theway the decision situation is perceived and understood,Messick (1999a) has applied some of March's (1995) ideasto individual decision making in social situations and has emphasizedthe importance of the perception of the situation.

In particular, he focused on the importance of judgments ofappropriateness in social situations that attempt to answerthe question, "What kind of situation is this?" For example,if the situation is competitive, then the proper thing to do isto figure out how to compete. If the situation is cooperative,it is appropriate to coordinate actions with others. At theheart of Messick's (1999a) theory are two assumptions. Thefirst is that the judgment of appropriateness influences notonly the perception of what type of behavior is proper butalso expectations of what others will do, what norms areapplicable, and what kinds of attributions about others arejustified. The appropriateness judgment thus determines acluster of perceptions, including what behavior is called forin that specific situation, Messick's second assumption concernsthe powerful influence of relatively minor, tangential,environmental cues, Larrick and Blount (1997), for instance,found that differences in levels of cooperation in social dilemasand ultimatum bargaining games were traceable tothe verbs used to describe the games to participants,"Claiming" part of a shared resource produced more cooperationthan "rejecting" or "accepting" someone else's offer,even though the payoff structures were identical, Messick(1999a) also reviewed sequential and temporal features,other linguistic variables, and justifications and reasons,which make a difference in levels of cooperation without influencingthe payoff structure.

The introduction of a surveillance and sanctioning systemmay serve as another cue, a cue that not only alters payoffs687/ASQ, December 1999but also alters the perception of the situation. We hypothesizethat a sanctioning system can transform a social dilemmafrom a situation in which the choice of competing orcooperating is infused with ethical and moral considerations,at least for some people, to one in which the choice ismainly about averting penalties or achieving rewards.

Thewritten comments offered by the participants of McCuskerand Carnevale's (1995) study provide informal support forthis hypothesis. If sanctioning systems convert the situationfrom one having ethical and economic connotations to onehaving mainly economic associations, we would expect cooperationto decrease if the costs for not cooperating arerelatively small. Thus, these systems can have two contradictoryeffects. They can create direct or indirect influenceson the propensity for cooperation and, at the same time,transform a situation into one that is primarily economic, andhence noncooperative, in meaning. This idea suggests thatsanctions can either increase or decrease cooperation, dependingon which of these impacts is foremost:

Hypothesis 1: When a sanctioning system is present, but likely tobe ineffective because of low detection probabilities and/or smallpenalties, the system may actually decrease cooperation as comparedwith a situation in which a sanctioning system is not present.This is a counterintuitive hypothesis in that it proposes thatadding penalties for defection in a social dilemma, albeitsmall, may actually decrease the rate of cooperation.Yamagishi's (1986, 1988, 1992) discussions on the indirecteffect of sanctions, Messick's (1999a) framework on theconnotative effect of decision frames in dependent variable"clusters," and discussions on the relationship betweensanctioning systems and trust (Strickland, 1958; Kruglanski,1970; Kipnis, 1972; Cialdini, 1996) all suggest that sanctioningsystems should affect not only cooperative behavior butalso expectations of others' cooperative behavior.

This researchwould predict a negative relationship between weaksanctions and expectations, either because of the positiveassociation between behavior and expectations, such thatdecreased expectations would be associated with decreasedcooperative behavior, or because of a direct negative effectof sanctions on beliefs about others. Thus, decreased expectationsof others' cooperation should also be prevalent insituations in which sanctions are weak.

The foundation for hypothesis 1 can be understood by consideringthe impact that sanctions have on the decisionframe or the type of decision that decision makers perceivethey are making. Pillutla and Chen (1999) have explicitlydemonstrated that the frame of a dilemma can influence thetendency to cooperate: a dilemma framed in an economiccontext produced less cooperation than a dilemma framed ina noneconomic context, even though both dilemmas had thesame payoffs. If frames do influence cooperation, then it isimportant to identify factors that evoke a particular frame. Asanctioning system may be one such factor. As discussedearlier, dilemmas conjure up both economic and ethical considerations.The presence of a sanctioning system shoulddirect attention to the fines associated with defection andheighten the focus on the economic or business componentsof the decision at the expense of the moral or ethical688/ASQ, December 1999Sanctioning Systemscomponents. More specifically, we propose that a sanctioningsystem shifts the balance between these two components:Hypothesis 2: The presence of a sanctioning system will lead tojudgments that the decision is more business in nature, whereasthe absence of such a system will lead to the perception that thedecision is relatively more ethical.We tested our two hypotheses with two studies. In the firststudy, we used a repeated two-party experiment to examinethe hypothesis that weak sanctions may fail to increase cooperationand may actually decrease cooperation and expectationsof cooperation in dilemma situations. In the secondstudy, we used a one-trial multiparty design to provide insightinto the findings of study 1 by investigating the influenceof sanctions on perceptions of the decision frame andto enhance the generalizibility of the findings by using a differentcontext than that used in the first study. We used theresults of these two studies to develop a more generalmodel of the influence of sanctioning systems on cooperationand then conducted a third study to test the model.STUDY 1Study 1 used a two-party, prisoner's dilemma to explore theinfluence of weak sanctioning systems on behavior and expectationsof others' behavior. This study was designed toallow for a comparison of cooperation rates and expectationsof cooperation rates when there are weak sanctions versusno sanctions. A multitrial design allowed a longitudinal assessmentof cooperation under these conditions.

MethodsEighty-four students who were enrolled in an undergraduatemanagement class participated in the study as part of aclass discussion on dilemmas. Given the important role thatthe behavior of others has been asserted to play in thesetypes of situations (Pruitt and Kimmel, 1977), the study wasdesigned as a 2 x 2 with sanctions as one independent factor(yes or no) and others' decisions (cooperate or defect) asthe second orthogonal, independent factor.Participants were asked to assume the role of Jones, a companyproduction manager who was responsible for producinghalf of the components of a particular home fitness system.Smith, the other production manager, was responsible forthe production of the other half of the components. Participantswere told that production of the components occurredsimultaneously, after which they were assembled into acomplete system and distributed to retailers. The dilemmawas set up so that the participants, in the role of Jones, hadto decide whether or not they should request quality inspectionsof the system. The dilemma was described to the participantsas follows:Requesting a quality inspection costs you money but less moneythan if a problem is diagnosed by the retailer or the consumer afterthe product has been shipped out. As a quality inspection occursafter the system is assembled, the report contains information oncomponent processes produced by both you and Smith, regardlessof who requested the inspection. Thus, if you request an inspectionand Smith does not. Smith will reap the benefits of the knowledge689/ASQ, December 1999that the inspection provides and vice versa. If you both request aninspection, you will both bear the cost of the inspection but theprobability that the product will be defective and need to be reworkedis relatively small. If neither of you requests an inspection,neither of you will incur the cost of an inspection but the probabilitythat the product will be defective and needs to be reworked will behigh.Participants were then told that their supervisors had puttogether an estimate of the unit profitability, which includedboth the cost of an inspection and the cost of reworking thesystem if no inspection occurred and a defect was foundafter the system had been shipped out. The unit profitabilityprovided to the participants is shown in table 1,

Table 1

Participants were then provided with a description of each ofthe four possible scenarios, including resulting profitabilityfor themselves and Smith in each of these scenarios. Participantswere further told that there would be four productionruns in which they would be asked to make an inspectiondecision; they would make this decision by indicatingwhether or not they would request that an inspection bemade.To test the hypotheses, we informed the participants in theweak-sanction condition that their inspection decisionswould occasionally be monitored. They received the followingadditional information, which those in the no-sanctioncondition did not receive:Occasionally, the division president conducts a random check todetermine whether or not an inspection should have been requestedfor your components. If the division president concludesthat you should have requested an inspection but you did not, youwill have to pay a fine worth $30, If the division president concludesthat you should have requested an inspection and you did,you will not pay a fine. You estimate the probability that the presidentwill conduct a check is very low, no greater than 5%,Before making any decisions, participants in the weak-sanctioncondition were shown a clear bag of jellybeans. In thisbag, 95 percent of the jellybeans were red and 5 percentwere yeilow. Participants were told that at the end of theexercise, a jellybean (with replacement) would be drawn foreach production run to determine if a random check had occurred.If the jellybean that was picked was red, no randomcheck had occurred and no one would be subjected to afine. If the jellybean was yellow, a random check had occurredand anyone who did not request an inspection wouldpay the fine. Participants in the weak-sanction and no-sanctionconditions were in separate classrooms to avoid contamination.

All participants were given the final instructionthat their goal was to maximize unit profitability.All participants were then asked to record whether theywished to request an inspection for the first two productionruns. They made two decisions (one for each run) at thispoint, recording each on a separate page. Following their decisions,participants were asked to estimate whether theybelieved Smith had requested an inspection in the first twoproduction runs, and they recorded two estimates, one foreach of the first two production runs.Participants then received information on Smith's actual decision.Half of the participants were told that Smith had requestedan inspection in both of the first two productionruns; the other half were told that Smith had not requestedan inspection in either of the first two production runs. Participantsthen made separate inspection decisions for thethird and fourth production runs and after completing thesedecisions, recorded their expectations of Smith's decision forthese two production runs. Finally, participants were askedto estimate on a 7-point scale how honest, cooperative, dependable,and trustworthy Smith was and to rate Smith'sintellectual ability and understanding of their role at the company.ResultsCooperation. For each of the four production runs, and foreach experimental condition, we recorded whether the participantcooperated or defected and recorded the proportionsof cooperation for each experimental condition. To assessthe impact of the independent variables on cooperation, weconducted a 2 (sanctions: yes or no) by 2 (Smith's decision:cooperate or defect) by 4 (production run, a within -subjectsvariable) ANOVA.

The results of this analysis indicated a significantsanctions x production run effect (F = 3.49, p < .05),a significant Smith's-decision x production-run effect (F =6.44, p < .001), and a significant effect for production run (F= 15.7, p < .001).The means underlying the interaction between sanctions andproduction runs are displayed in figure 1, which shows cooperationrates over the four runs. The presence of a sanctioningsystem seems to produce a decrease in cooperation inrounds two and three but an increase in cooperation in thefourth round. In support of hypothesis 1, analysis of the differenceswithin rounds revealed a significant difference incooperation by sanction condition in the second productionrun (F = 3.93, p < .05), with 70 percent cooperating in theno-sanction condition and 48.8 percent cooperating in theweak-sanction condition. There were no other significant differencesby round. The main effect for production run displayedin figure 1 shows that the rate of cooperation decreasesover time.The interaction between Smith's decision and production runis artifactual and of no theoretical interest. Since Smith's decisionwas announced following the second production run,there can be no effect prior to that time. For production runs3 and 4, there was much less cooperation when participants691/ASQ, December 1999Figure 1. Cooperation rates over production runs, study 1.

believed Smith had defected (27.9 percent) than when Smithhad cooperated (57.3 percent).Expectations of cooperation. The relationship between asanctioning system and expectations should be greatest beforeparticipants are given additional feedback about the other'sbehavior (another environmental cue). We used an overallANOVA to analyze subjects' expectations of Smith'scooperation as a function of sanctions. Smith's decision, andproduction run (a within-subjects variable). The results revealeda significant main effect for production run {F = 6.81,p < .001) and an interaction between Smith's decision andproduction run {F = 6.97, p < .001). The interaction ofSmith's decision with production run is artifactual in preciselythe same way as the interaction involving the cooperationdependent variable. Smith's decision had no impact inthe first two runs, but in the final two runs the expectationsfollowed the feedback that the participants had been given.For participants who were informed that Smith had defected,the mean expected cooperation was 43 percent; forthose who were told that Smith had cooperated, the meanexpected cooperation was 68.3 percent. The main effect forproduction run reflected the fact that expectations of cooperationdecreased from run 1 to run 3 but then increased inrun 4. These means are 74.4 percent, 70.7 percent, 50 percent,and 60.7 percent, respectively.

While the overall analysis failed to reveal any effects forsanctions, sanction-evoked expectations should be paramountin the first two runs, before feedback is given aboutSmith's actual choices. As this feedback is a more accuratebasis on which to form expectations, this information shouldbe the primary influence on expectations when it is available.The data presented above confirm this assertion. Without692/ASQ, December 1999Sanctioning Systemsthis information, however, expectations may be influencedby a more subtle cue, such as the presence of a sanctioningsystem. To test this notion, we conducted a 2 (sanctions:yes or no) by 2 (production run) ANOVA on expectations forjust the first two runs before feedback was provided. Thisanalysis revealed only a significant effect for sanctions (F =4,50, p < ,05), with participants in the weak-sanction conditionexpecting that Smith would cooperate an average 64,3percent of the time and participants in the no-sanction conditionexpecting that Smith would cooperate 81,2 percent ofthe time. These data thus support a negative relationshipbetween sanctioning systems and expectations of cooperationby others.There were no differences in the trait ratings (honesty, intelligence,etc) as a function of the sanctioning condition; however,these ratings were markedly influenced by the decisionthat Smith made, with more desirable ratings occurringwhen participants were told that Smith had cooperated.DiscussionSanctions decreased cooperation in the early productionruns, with a significantly lower cooperation rate in the secondproduction run. The relative decrease in cooperation betweenthe first and second runs in the weak-sanction conditionsuggests a pattern in which sanctions, in the absence offeedback about others' decisions, may encourage defection.Similarly, expectations of cooperation in the first two productionruns were lower in the weak-sanction condition, suggestingthat a sanctioning system may also have a negativeinfluence on perceptions, perhaps promoting a distrust ofcoworkers.

Cues that influence perceptions of the situation vary in bothstrength and their impact on judgments. The presence orabsence of a sanctioning system is not as powerful a cue asknowledge of the behavior of others. Our data support theintuition that when feedback is given about Smith's choices,the influence of the sanctioning system disappears. The datafurther suggest that the strength of the sanctioning cue maybe influenced by the proximity to the sanction. While therewas a steady decrease in cooperation in the weak-sanctioncondition in the first three rounds, there was an increase incooperation in the fourth round. There was no fourth roundincrease in the no-sanction condition. One explanation forthis difference centers around the salience of the possiblefine for the weak-sanction participants, who were told thatthe occurrence (or lack thereof) of the random checks wouldbe revealed after the fourth production run. The proximity tothe possibility of a sanction may have increased the cuestrength of the sanctioning system and hence enhanced thelikelihood that the fine was considered.

Overall, the pattern of results is consistent with our expectation,although the strength of the findings is modest. Thepresence of a sanctioning system decreased cooperationand the expectation of cooperation early in the interaction.Perhaps the most important feature of the data is that thepattern we report is inconsistent with predictions from expectedutility maximization. Adding potential costs to the defectionalternative did not decrease the probability of defec-693/ASQ, December 1999tion. This intriguing, counterintuitive effect motivated oursecond study.STUDY 2In this study, we sought additional support for the findingsof the first study, that cooperation and expectations of cooperationdecreased in the presence of a sanctioning system,but also examined whether the perception of the situation isaltered by sanctioning systems. The second study used amultiparty social dilemma scenario in which individuals wereagain given the opportunity to cooperate or defect. In additionto examining this decision under conditions of sanctionsversus no sanctions, we also investigated the influence ofsanctions on perceptions of the decision frame.

MethodsFifty-six master's of business degree students participated ina social dilemma scenario as part of a classroom discussionon social dilemmas. Participants assumed the role of a managerwho supervised a moderate-sized manufacturing plant.Participants were told that manufacturers in this industrywere faced with the problem of emissions of a toxic gas,VS-1, which was produced during the production process.Environmentalists were becoming increasingly concernedabout the problem and were proposing that all smokestacksbe equipped with "scrubbers" that would eliminate the toxicgas if they operated 100 percent of the time.

With the potential threat of the environmentalists lobbyingfor legislation for 100 percent utilization of the scrubbers, themanufacturers in the industry had come together andreached an agreement in which all manufacturers would installscrubbers and run them 80 percent of the time. Thissolution was described as being acceptable to the environmentalistsand one way to avoid legislation, which was estimatedto cost $3 million in legislation and compliance costs.Participants were told that they had two options: (1) run thescrubbers 80 percent of the time at an estimated cost of$1.2 million or (2) run the scrubbers less than 80 percent ofthe time, with each 20 percent interval of operating timecosting $.3 million (i.e., if the scrubbers were run 20 percent,a $.3 million cost would be incurred, if they were run40 percent, a $.6 million cost would be incurred, etc.). Participantswere then made aware that the other manufacturershad the same choice. If most of the other manufacturerscooperated by running their scrubbers 80 percent of thetime, there would be no legislation and no compliance costs,but if most of the other manufacturers defected and rantheir scrubbers less than 80 percent of the time, legislationand compliance costs would be incurred. Thus, there werefour potential outcomes, as shown in table 2.

Participants were told that their perception of whether or notlegislation would occur corresponded with their perceptionsof the decisions of the other manufacturers. Participantswere told that they did not expect legislation ("no") if mostof the other firms abided by the agreement, but they did expectlegislation ("yes") if most of the other firms did notabide by the agreement. Participants were then providedwith information on the sanctioning system. In the no-sanc-694/ASQ, December 1999Sanctioning SystemsTable 2

tion condition, participants were told, "There will be no inspectionsor enforcement of the agreement." In the weak sanctioncondition, participants were given the followinginformation:To enforce the agreement to operate the scrubbers 80% of thetime, representatives of the industry will conduct random checks ofsome manufacturers. You estimate that there is less than a 5%chance of being inspected, and that, even if you are inspected andfound to be operating your scrubbers less than 80% of the time,the fine ($50,000) is negligible.All participants were then asked to make a decision on thepercentage of time that they would operate their scrubbersand to explain the basis for their decision. In addition, participantsalso estimated the percentage of others in the classwho would operate the scrubbers less than 80 percent ofthe time, the environmental damage that would be causedby operating the scrubber less than 80 percent of the time,the likelihood of getting caught if the scrubbers were operatedless than 80 percent of the time, and the responsibilityof the plant manager. Environmental damage was assessedusing a multiple choice format with possible responses of"none," "little," "a moderate amount," "a large amount,""do not know," and "does not matter." The likelihood ofgetting caught was assessed using a multiple choice scale,with possible responses of "impossible," "unlikely," "reasonablylikely," "certain," "do not know," and "does notmatter." Responsibility was assessed using a multiplechoice format with possible responses of "to run the plantprofitably, no matter what," "to run the plant profitably, andalso to protect the environment," "to protect the environment,and to run the plant profitably while doing so," "toprotect the environment, no matter what," and "other,please describe." Participants were also asked, "If you hadto choose one description for this decision, how would youdescribe it?" Their options were as follows: a personal decision,a business decision, an ethical decision, an environmentaldecision, and a legal decision. This was our measureof perceived decision frame.

ResultsParticipants recorded the percentage of time that they wouldrun the scrubbers. Some of the responses were written andnot numerical, for instance, "less than 80 percent." As a result,we dichotomized the responses as either indicative ofcooperation (responses of 80 percent or more) or defection (responses of less than 80 percent). We then calculated theproportion of cooperative responses in the two conditions.Supporting hypothesis 1, the rate of cooperation was lowerin the weak-sanction condition than in the no-sanction condition(F= 6,223, p < ,05), Specifically, only 44,4 percent (12/27) of those in the weak-sanction condition cooperatedwhereas 75,9 percent (22/29) of those in the no-sanctioncondition cooperated. Furthermore, the presence of a sanctioningsystem resulted in decreased expectations of others'cooperation (F= 6,724, p < ,01), with participants in theweak-sanction condition expecting that 44,7 percent of theother students would cooperate as compared with an expectationof 61,2 percent in the no-sanction condition. We foundno significant differences for the perceived likelihood of defectorsbeing caught, for the amount of environmental damagedefection would cause, or assessments of the plantmanager's responsibility as a function of the presence or absenceof sanctions.

Table 3

Table 3 displays the distribution of selected decision frames in the two conditions. As all but two of the participants selected either "Business decision" or "Ethical decision," we excluded these two participants to examine the difference in the proportion of participants who selected business decisionover ethical decision. Supporting hypothesis 2, analysisrevealed a significant result (F= 7,73, p < ,01), with 44,8percent selecting business decision in the no-sanction conditionand 80,0 percent selecting business decision in theweak-sanction condition. These data confirm the hypothesisthat the presence or absence of the sanction system influencesthe decision frame, or perception of the situation.Table 4 further details individuals' perceptions of the situationby providing a sample of the participants' written commentsabout the basis of their decision.

We conducted analyses to test whether the relationshipsbetween sanctions and behavior and sanctions and expectationsare mediated by the decision frame that is adopted.This analysis revealed that when we controlled for decisionframe, the significant relationship between sanctions andcooperation {F - 7,94, p < ,01) became insignificant (F =2,74, n,s,), but the significant relationship between sanctionsand expectations (F= 8,45, p < ,01) remained significant (F= 5,00, p < ,05), Examination of responses revealed that theadoption of an ethical frame led to a 90,5 percent cooperationrate and an expectation that 61,9 percent of otherswould cooperate, whereas the adoption of a business frameled to a 39.4 percent cooperation rate and an expectationthat 46.8 percent of others would cooperate.

Table 4A Sample of Participants' Written Comments in the Weak-Sanctionversus No-Sanction Conditions, Study 2No sanction"That's what we agreed to and that's what is best for the localcommunity." (Cooperate)"It is the right thing to do for the community. In good faith I wouldn't askother companies to run 80%, then run my company less than 80%."(Cooperate)"There is an ethical point to follow through on the agreement. It could costsome in the short run at 80% but in the long run the firm would be betteroff." (Cooperate)"As a plant manager, I feel that I would have a dual responsibilityboth tothe profitability of the firm and to the environment." (Defect)"We are looking for a balance between keeping jobs and protecting theenvironment." (Defect)"You have the opportunity to increase if others show the same sign of goodfaith or it becomes a requirement." (Defect)Weak sanction"The potential benefits of generating at < 80% are outweighed by thepotential losses." (Cooperate)"If everyone complies = $1,200,000. If < 80% it will lead to legislationanyway. So just hope that everyone else will do 80%." (Cooperate)"The costs incurred at the 80% level without legislation is far better thanany of the costs with legislation. I would pay $1.2 million now to avoidpossibly paying $3 million or more in the future." (Cooperate)"I would not operate the scrubbers because if my decision will not affectthe other manufacturers' decisions I will receive the best outcome."(Defect)"If there is only a 5% chance of being inspected, I would risk the $50thousand fine and then comply with the standards. If I were caught then Iwould operate at 80%." (Defect)"The chance of inspection is small and so is the fine." (Defect)

An additional analysis that investigated the relationshipsamong decision frame, decision, and expectations revealedthat the significant relationship between decision frame andexpectations (F= 5.11, p < .05) became insignificant whendecision (cooperate/defect) was controlled for (F = .069,n.s.). Conversely, the significant relationship between decisionframe and decision (F= 17.94, p < .001) remained significantwhen expectations of others was controlled for inthe analysis (F= 11.57, p < .001). These results suggest thatthe frame may influence behavior, which in turn may influenceexpectations.

DiscussionResults provide support for the notion that a weak sanctioningsystem can actually decrease cooperation, decrease expectationsof cooperation, and influence perceptions of thesituation. Results revealed that the presence of weak sanctionspromoted a focus on the business aspects of the decisionin contrast to a focus on the ethical aspects when nosanctions were present. The written comments further supportthe notion that a weak sanctioning system prompts aperception that the decision concerns the costs versus thebenefits of cooperating, whereas the lack of such a systemprompts relatively more consideration of the ethical aspectsof the decision. Messick's (1999a) arguments help to structurethese findings. Our analysis revealed that the relation- ship between sanctioning systems and cooperation rates canbe explained by the decision frame that is adopted. Congruouswith Messick (1999a), this finding indicates that thesanctioning system acts as a situational cue that triggers anassessment of the type of decision that one is making (i.e.,ethical or business), which in turn influences cooperationrates. Thus, the sanctioning system influences the frame,but it is the frame that determines the behavior.

The analysis did not support the hypothesis that the framewould explain the relationship between sanctions and expectationsof others, but the finding that the decision mediatesthe relationship between the frame and expectations suggeststhat there may be a hierarchical order to the cluster ofperceptions and actions that a given frame evokes. Whilethe expectation-choice relationship is one possible basis forthe relationship between sanctions and behavior, such thatexpectations drive behavior (see Van Lange, 1991), theseresults are more indicative of a choice-expectation relationship(see Dawes, McTavish, and Shaklee, 1977; Tenbrunsel,1998), in which one's behavior influences the expectationsof others. It may be that individuals distort their expectationsof others to justify their own behavior (Tenbrunsel, 1998),rather than expectations serving as a signal for the appropriatebehavior.

STUDY 3The first two studies support our proposal that weak sanctioningsystems can actually decrease cooperation. Study 2also provides possible insight into why this occurs, suggestingthat sanctioning systems may change the type of decisionthat one is perceived to make, from that involving anethical premise to one with a more rational, calculative, businessfoundation. Yamagishi's (1986, 1988) and McCuskerand Carnevale's (1995) results, however, suggest that sanctioningsystems promote cooperation, which is directly oppositeto the results presented thus far in this paper. We believethat these results can be reconciled with thosepresented in this paper by exploring the conditions underwhich the various results are expected to hold true. One ofthose conditions is the strength of the sanction, such thatsanction strength is related to cooperative behavior; however,we predict that this will only be true when a businessframe has been evoked.

We are thus arguing that to determine the directional influencethat sanctions have on cooperation, one must considerboth the decision frame that is evoked and the strength ofthe sanction. To understand these assertions, it is necessaryto consider the range of possible outcomes that can occurwhen a sanctioning system is introduced. As depicted in figure2, an understanding of the relationship between sanctioningsystems and cooperation rates involves a considerationof two effects; (1) a signaling effect, in which thepresence of a sanctioning system signals the type of decisionone is making, and (2) a processing effect, in which thedecision processing that occurs, including whether or not thestrength of the sanction is considered depends on the framethat has been evoked.

P(E) = Probability of an ethical frameP(C/B) = Probability of cooperation given a business frameP(C/E) = Probability of cooperation given an ethical frame

The upper half of the model postulates a signaling effect,such that the presence of a surveillance and sanctioning systemchanges the perception of the situation. Empirically supportedby the findings in study 2, the model proposes that abusiness frame, as opposed to an ethical frame, is morelikely to be adopted when a sanctioning system is presentthan when such a system is absent.The lower half of the model proposes that the resulting processingthat occurs depends on which decision frame hasbeen evoked. As depicted, when an ethical frame is evoked,cooperation should be the dominant choice, independent ofthe presence or absence of a sanctioning system and theexpected cost of the sanctions. This assertion resonateswith Kramer and Messick (1996), who examined cooperativebehavior in organizational dilemmas from an ethical perspective.

They asserted that from the standpoint of ethical reasoning,moral choices are synonymous with cooperativechoices, independent of the basis for that reasoning. Thus,from a utilitarianism perspective, they argued that the moraldecision is obvious: "to make the cooperative choice sincethat is the alternative that, by definition, maximizes the collectivewelfare" (Kramer and Messick, 1996: 66), Similarly,from a deontological perspective, the cooperative choice isalso seen as the moral choice because it is both universalizable(the decision maker's reasons for acting are the reasonseveryone could act on this principle) and reversible (the decisionmaker's reasons are reasons that the decision makerwould want others to act on). Thus, when one is reasoningfrom an ethical perspective, the dominant choice should becooperation.

When a business frame is evoked, however, there is nodominant strategy. Rather, a business frame produces a calculativecost-benefit process in which cooperation rates dependon the strength of the sanction. This argument coincideswith the literature on punishment, which posits thatindividuals engage in a utility calculation that compares thecosts and benefits of the punishment (e.g., see Trevino,1992). The processing heuristic that is characteristic of thebusiness frame should result in cooperation rates that are intandem with the costs: the higher the cost of defecting (i.e.,the stronger the sanction), the higher the expected cooperation.The processing effects within a business frame versusan ethical frame should therefore be quite different:Hypothesis 3: Within an ethical frame, cooperation will be thedominant choice and will not be influenced by economic considerationssuch as sanction strength, while within a business frame,cooperation will depend on the strength of the sanctioning system.Thus, in contrast to situations in which there are weak sanctions,we expect cooperative behavior when there are nosanctions or when there are strong sanctions, but that thebasis for the cooperative behavior in these two situationswill be very different. When no sanctions are present, individualscooperate because it is the ethical action to take.

When strong sanctions are present, individuals cooperatebecause it is the more profitable business strategy. Thus,while a strong sanctioning system may promote the desiredlevel of cooperation, the basis for this cooperation is differentthan the basis for cooperation when a sanctioning systemis not present. To test the processing effect prediction,we conducted a third study to analyze the influence of sanctionstrength. We accomplished this by adding a strongsanctioning condition to the design used in the secondstudy.

MethodsOne hundred and thirty-three master's of business degreestudents participated in the same social dilemma scenariodescribed in study 2. The description of the scenario wasidentical to that used in the second study, and the same twoconditions, no-sanction and weak-sanction, present in thatstudy were also present in this study. This study, however,introduced a third, strong-sanction condition. Participants inthis condition were given the following information:To enforce the agreement to operate the scrubbers 80% of thetime, representatives of the industry will conduct random checks ofsome manufacturers. You estimate that there is at least a 50%chance of being inspected and that, if you are inspected and foundto be operating your scrubbers less than 80% of the time, the fine($2,000,000) will be substantial.As in study 2, participants were asked to make a decision onthe percentage of time that they would operate their scrubbers,the percentage of time that others would operate theirscrubbers, and the type of decision that they perceivedthemselves to be making.

ResultsCooperation rates did significantly vary by version {X^ = 6.23,p < .05), with cooperation rates of 64.4 percent in the nosanctioncondition, 54.6 percent in the weak-sanction condition,and 79.5 percent in the strong-sanction condition.These results follow the curvilinear pattern implied by themodel, with cooperation higher in the no-sanction andstrong-sanction conditions than in the weak-sanction condition.Results also revealed that the presence of a sanctioningsystem (weak and strong) did increase the likelihood that abusiness frame rather than an ethical frame was evoked,with only 29.1 percent in the no-sanction condition identifyingthe decision as a business one compared with 42.5 percentof individuals in the weak- and strong-sanction conditions.This difference, while consistent with hypothesis 2,was only marginally significant (F= 2.15, p < .15).Results supported the hypothesis that motivated this study,namely, that different frames are characterized by differentprocessing effects and lead to different cooperation rates.

There was a significant difference in the degree of cooperationexhibited between individuals who adopted a businessframe and those who adopted an ethical frame [F - 16.9, p< .001). When an ethical frame was adopted, 90 percent ofthe individuals in all three conditions cooperated, whereaswhen a business frame was adopted, only 53.3 percent ofthe individuals cooperated. To assess whether cooperationwas a dominant strategy (i.e., greater than defection), weconducted f-tests that analyzed whether the cooperation ratewas different from 50 percent. This analysis revealed that forindividuals who adopted an ethical frame, the cooperationrate was different from 50 percent {t = 8.33, p < .001), supportingthe assertion that cooperation is the dominant choicewithin an ethical frame. Moreover, there was no indicationthat the cooperation rate within a business frame was significantlydifferent from 50 percent (f = 0.57, n.s.), suggestingthat neither cooperation nor defection were dominantwhen a business frame had been evoked. There was also nosignificant difference between frames for expectations ofothers' cooperative behavior (F< 1, n.s.).

Further supporting this hypothesis were results showing thatthe strength of the sanction did influence cooperative behaviorwithin a business frame (F = 3.04, p < .05), with no indicationthat the strength of the sanction influenced cooperativebehavior within an ethical frame (F= 0.73, n.s.). When abusiness frame had been adopted, cooperation rates were43.5 percent, 42.3 percent, and 71.4 percent in the no-sanction,weak-sanction, and strong-sanction conditions, respectively;when an ethical frame had been adopted, cooperationrates were 94.1 percent, 80 percent, and 92.3 percent in theno-sanction, weak-sanction, and strong-sanction conditions,respectively. Also supporting the hypothesis is the significantdifference (F = 4.93, p < .05) in cooperative behavior betweenthe weak- and strong-sanction conditions when abusiness frame had been adopted.

A similar result was found in the analysis of expectations ofothers' cooperative behavior within a business versus anethical frame. When a business frame had been adopted,expectations were significantly influenced by sanctionstrength (F= 4,07, p < ,01), with expectations of cooperationequal to 37,6 percent, 53 percent, and 60,4 percent inthe no-sanction, weak-sanction, and strong-sanction conditions,respectively. When an ethical frame had beenadopted, however, there was no indication that expectationswere influenced by sanction strength (F= 1,48, n,s,). Whilethese results are similar to those found in relation to cooperativebehavior, the pattern is somewhat different: whenthe weak-sanction condition is compared with the no-sanctioncondition, cooperative behavior is equal to or slightlylower in the weak-sanction condition than in the no-sanctioncondition, but expectations of cooperative behavior arehigher.

DiscussionThe results support the notion that different frames inducedifferent processing effects and, in doing so, have differenteffects on cooperative behavior. The adoption of an ethicalframe appears to lead to a relatively straightforward "cooperative"heuristic that is not influenced by the strength ofthe sanction. Conversely, a business frame induces a calculativedecision process whereby the strength of the sanctioninfluences the degree of cooperative behavior. These resultssuggest that while there are no ethical reasons for defecting,there may very well be business reasons for cooperating(i,e,, cost). These results thus help to reconcile the findingsof Yamagishi (1986, 1988) and McCusker and Carnevale(1995), which demonstrate that strong sanctioning systemsresult in cooperation, and those found in the first two studies,which demonstrate that weak sanctioning systems canreduce cooperation. Likewise, the results also support thepunishment literature, where it has been argued that one ofthe reasons that punishment may deter misconduct is becauseof the increased risks that enter into a cost-benefitcalculation (Trevino, 1992), But the findings add a caveat tothe assertion that the strength of the sanction and cooperativebehavior are positively related, suggesting that this isonly true when a business frame has been evoked.As in study 2, the pattern between sanctioning systems andexpectations of others was not congruous with the patternbetween sanctioning systems and cooperative behavior. Furthermore,while there is evidence from both studies that thetwo are closely related, the evidence suggests that the proposedmodel more accurately captures behavior than expectations.One possibility for the lack of similarity in patterns isthat expectations are influenced by other situational cues(e,g,, reputation of others, group culture) that were not measuredin these studies. Another possibility, supported bystudy 2, is that there is a more complex, double-mediationalrelationship among sanctions, decision frames, behavior, andexpectations than previously hypothesized. While the purposeof this paper was to investigate the role of sanctionsand decision frames in influencing cooperative behavior,rather than the relationship between behavior and expectations,the strong relationship between these two and theresults of these studies suggest that this relationship meritsmore attention.

Although the results of study 3 were in the predicted direction,they did not provide additional statistical support for theresults from the second study, namely, that a sanctioningsystem would be more likely to evoke a business than anethical frame. Given the use of identical materials, this resultmay seem surprising, but research suggests that the cues toevoke different perspectives or frames may be very subtle.Samuelson and Allison (1994) found, for example, thatchanging the label given to the first person allowed to harvestfrom a common resource pool from "leader" to "supervisor"increased the amount of self-restraint exhibited bythat person. Similarly, Eiser and Bhavnani (1974) found thatcooperation rates in a prisoner's dilemma were higher whenit was described as an international negotiation than as aneconomic bargaining situation. The results from the firststudy also hint at the subtle nature of environmental cues. Inthat study, the presence of one cueinformation about others'decisionsdiminished the impact of the sanctions cue.In addition, the sudden increase in cooperation as the possibilityof a sanction drew closer suggests that proximity to acue may be another factor that changes a cue's influence.Like the conclusion reached by Kramer and Messick (1996),these findings suggest that cues that influence perceptionsof a situation can be very subtle. While the results from thesecond study demonstrated that sanctioning systems didinfluence perceptions of the decision frame and those fromthis study were in the predicted direction, the lack of significancein this study suggests that there are a variety of othercues that may reduce the magnitude of this effect. The timingof the data collection relative to the semester (i.e., beginningversus middle), the last lecture that one had, and thefocus on political ethics in the media are just a few of theother cues that may have also influenced the perception ofthe situation. Thus, sanctioning systems are just one of themany influences on decision construals. While the subtletyof these cues increases the complexity of determining whatparticular frame has been adopted, the results suggest thatonce this is understood, predicting the resulting behaviormay in fact be simplified.

CONCLUSIONAs Barnard (1938: viii ) wrote, "Essential to the survival oiorganization is the willingness to cooperate." Understandingforces that promote or reduce the tendency to cooperate,then, is vital to ensuring the success of organizations andsociety. Our results suggest that, left unattended, the tendencyto cooperate and to expect cooperation from othersdecreases as time goes on. The emphasis on monitoring andcontrol in organizational theories supports the implementationof surveillance and sanctioning systems as a possiblemechanism for curbing this decreased tendency to cooperate.As is evident from the studies presented here, however,these systems, at least those characterized by a low probabilityof detection and small fines, may actually produce anincrease in undesirable behaviors.Using this finding as a springboard, we modeled the complexrelationship between sanctions and cooperative behav-703/ASQ, December 1999ior as influenced by both a signaling effectin which sanctionscan change the type of decision frame that isadoptedand a processing effectin which the frame influenceswhich choice rules are used. We found support forthe notion that the presence of a sanctioning system influencesthe decision frame that is adopted, increasing the likelihoodthat a business frame, versus an ethical decisionframe, is evoked. In turn, the different frames that areadopted result in different processing values: within an ethicalframe, cooperation becomes the dominant choice, independentof the strength of the sanction, whereas in a businessframe, cooperation is determined by an analytic, costbenefitprocess in which sanction strength is taken intoconsideration. These results not only provide support for theinfluence of strong sanctions on behavior (Yamagishi, 1986,1988; McCusker and Carnevale, 1995) and for the relationshipbetween the framing or wording of a situation and cooperationrates (Larrick and Blount, 1997; Pillutia and Chen,1999), in so doing, they also offer an enhanced cognitiveperspective that organizes and helps inform this research.The findings from these studies have important organizationalimplications. First, they imply that weak sanctions intendedto increase cooperation may actually reduce it. Second,they imply that strong sanctions may increasecooperation but that the basis for this cooperation (i.e., it isthe economically rational course of action) is different thanthe basis for cooperation when no sanctions are present (itis the right thing to do). With the first motivation, a changein payoffs or surveillance could lead to a dramatic reductionin cooperation. These results thus suggest that organizationsneed to examine very carefully the expected benefits andcosts of sanctioning systems, including decreased cooperationand a favoring of the economic over the ethical aspectsof a decision. Ironically, these systems have been identifiedas one mechanism by which ethics can be instilled in organizations(Lindsay, Irvine, and Lindsay, 1996). The findings thatsuch a system may actually decrease the extent to whichethical considerations are taken into account implies that weneed to exhibit caution when implementing this recommendation.At the very least, these studies suggest that organizationsshould think twice before implementing weak sanctioningsystems, for they will not only pay the cost of the systembut also incur the cost of decreased cooperation. One mayargue, as Gellerman (1986) has, that the most effective solutionis simply to implement a system in which the probabilityof getting caught is much higher. While our results suggestthat this may have the desired result of increasing cooperationwhen individuals believe that they will be caught, wealso found that the basis for this cooperation is differentthan the basis for cooperation when no sanctioning systemis present. Individuals cooperate because it makes economicor business sense to do so, not because it is the moral orethical thing to do. These cognitive changes, which were thefocus of this paper, may have motivational implications thatcan also produce undesirable effects. In addition to beingprohibitively expensive, a strong sanctioning system mayfurther enhance individuals' perception that their behavior isbeing externally controlled, Brehm's (1966) reactance theoryposits that controlling or restricting behavior may induce amotivational state in which the restricted individuals attemptto reestablish their threatened freedom. This reactance maynot only show up in increased defection when individualsfeel they will not be caught, it may also lead to deviant actionsin which individuals attempt to trick, manipulate, or bypassthe system. As Cialdini (1996: 57) wrote, this in turnmay only result in "supervisors scurrying to find even moresophisticated (and expensive) control systems,"Rather than advocating that organizations engage in such aself-defeating cycle, we believe that attention should insteadbe focused on understanding the psychological reactions tocontrol systems. Research that investigates cues thatchange individuals' construals of these systems will be usefulin further resolving disparate findings on the effects ofsuch systems. These cues may originate from environmental,structural, and/or personal factors. As suggested by Messick(1999a) and demonstrated by Larrick and Blount (1997),the "cover story" and, more generally, the linguistic cues(i,e,, "accepting" versus "claiming") that are used may beinfluential in decision construals. Thus, how the problem ispresented to an individual may influence perceptions of thedecision frame. This frame may likewise be influenced bythe type of social dilemma presented, Messick (1999b) suggestedthat social dilemmas differ in terms of their temporal,collective, moral, and outcome perspectives. These perspectivesin turn may influence perceptions of the situation. Forexample, dilemmas that are multitrial and involve a collectivedecision (i,e,, conserving resources) may be more likely toproduce an ethical frame than single-shot, individual-baseddilemmas. Similarly, volunteer dilemmas, in which individualsare asked to volunteer resources (i,e,, time), may evoke anethical frame, whereas competitive strategy dilemmas mayevoke a business frame. More related to the focus of thisstudy, the type of sanction that is used may also influenceperceptions of the decision that is to be made. There is anongoing debate as to the relative effectiveness of rewardversus punishment (e,g,, see Beyer and Trice, 1984; Trevino,1992), which might be resolved by examining the differentdecision frames that these types of sanctions can evoke.The factors that determine sanction strengthi,e,, size ofthe sanction versus the probability of getting caughtmayalso differentially influence the salience and, hence, relevanceof a sanction cue. An individual's social value orientationhas also been found to influence cooperation in socialdilemmas (Kramer, McClintock, and Messick, 1986; McClintockand Liebrand, 1988), which may be explained by thedifferent decision frames that different value orientations induce.Research that investigates these and other factors thataffect the construal of the situation will be useful in providinga contingency framework for understanding when sanctioningsystems make sense and when they do not.More fundamentally, we need to reexamine the assumptionsthat have been made in organizational theories of control,Beatty and Zajac (1994) argued that most of the literature onexecutive compensation neglects the goals of the individual,assuming that individuals prefer less effort to more effortand more money to less money. We believe that this type ofblanket assumption characterizes much of the research oncontrol systems, in which it is assumed that the decreasedpayoffs as a result of surveillance and sanctioning will decreasedefection. Our results contradict this assumption andsuggest that if we are to truly understand the factors thatinfluence cooperation, we need to explore the assumptionsthat we have made about individuals and their reactions tomechanisms designed to promote cooperative behavior. AsPfeffer (1994) asserted, these mechanisms and policiesneed to take into account our knowledge of human behavior.We agree and believe that there is a need for more empiricalresearch aimed at furthering "what we know about people"(Pfeffer, 1994: 115), particularly in understanding the unintendedinfluence of control systems on individuals' perceptionsand behavior.